California Bill ACA 10 - "Housing is a Human Right" - Depends on who is Paying for it , by Mary Cummins

Bill Assembly Constitutional Amendment ACA 10 has been proposed to state that housing is a human right in California. Below is from the bill.

"Article  XXV Right to Housing

SECTION 1. The state hereby recognizes the fundamental human right to adequate housing for everyone in California. It is the shared obligation of state and local jurisdictions to respect, protect, and fulfill this right, on a non-discriminatory and equitable basis, with a view to progressively achieve the full realization of the right, by all appropriate means, including the adoption and amendment of legislative measures, to the maximum of available resources."

Below is from supporters of the bill.

"California, a safe, affordable home is currently a privilege reserved for those who can afford the state’s skyrocketing housing costs. Our state is home to a quarter of all unhoused people in the nation, and more than half of all unsheltered people. Due to generations of racist housing policy, these burdens of housing insecurity fall hardest on Black Californians.

Assembly Constitutional Amendment (ACA) 10 will recognize that every Californian has the fundamental human right to adequate housing. Here is what this would mean in our state:

An obligation on the part of the local and state governments to ensure that all Californians have access to adequate housing;

A commitment to ensuring equitable access to housing that is not subject to any form of discrimination; and

A recognition that the right to housing is not merely a roof over one’s head, but rather adequate housing is permanent, habitable, affordable, and close to employment, healthcare, and schools."

My issue with this bill is who will be paying for it? Are they talking about government housing? We all know the government got away from public housing because they turned into slums in some areas. They are more expensive to run than regular apartments because of government administrative fees of at least 15%. They were rife with corruption because of the government bidding system. They concentrated lower income, disabled, elderly people, POC into specific high density areas which ended up becoming high crime with limited services. Some even said it was segregation and discrimination which it was indirectly because blacks, Latinos, elderly, disabled make less money than whites, younger people and able bodied.

If they are talking about forcing private landlords to subsidize public housing, I'm totally against this. Rent control has harmed the economy. If we didn't have rent control in Los Angeles, the city would have billions in property, income, transfer tax which they could use to subsidize housing for homeless. I fully support fair and legal eviction control. I support all rental housing to be safe and legal. I don't support forcing private individuals paying most of the rent of anyone who happens to score a rent control unit. I've seen people paying $216/month for a two bedroom in Santa Monica. The renters aren't even low income but high income. They don't give rent control units to low income so the program doesn't even serve a purpose. Generally people would move to a cheaper area when they can't afford the rent. That's what commercial and regular tenants have done for years. I'm sure if private homeowners were forced to allow homeless people to live in their homes, they would also oppose the forced taking of private real estate for public use without proper compensation.

What the government needs to do is allow developers to build housing. This means not allowing NIMBYs to stop projects that benefit the community. If the government hadn't stopped housing development for the last 50 years, we'd have enough affordable housing today. Any housing we build today costs too much because of today's high cost of land and construction. If they were built 50 years ago, they'd be affordable today because they'd be a B, C class building.

Government decided to force developers to build expensive units then forced them to rent some or all to low income earners. This makes no sense. It's not sustainable because there is no profit or incentive to build those units. It's unconstitutional for the government to force only one industry to subsidize lower income people. You don't see the government forcing grocery stores, water vendors, doctors, dentists, car dealers, clothing retailers to sell for a loss. We all fundamentally need food, water, medical care, cars sometimes and clothes.

If the bill passes, I believe it'd probably just be lip service. I see no way they can figure out a fair way to build affordable or free housing today in California. All the ways they've tried so far haven't worked. You can't have rent control, NIMBY power, forced private low income housing and affordable housing for all. Something has to give.

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.

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Nazario Incorrectly Blames Their Home Affordability Issues in Los Angeles on Government by Mary Cummins

This family of four tries to blame the government for their inability, unwillingness to cheaply rent or buy a home in central Los Angeles on their low wages with little savings. There are a few issues here the biggest being their relatively low wages. The article states the two daughters graduated from college. Jennifer Nazario got a Masters in economics and Paula Zanario got one in public policy. Their Opinion op-ed piece shows they may not have been paying attention in class.

People making minimum wage can't afford to rent a one bedroom in LA same in SF and NY let alone buy a home. Median rent for one bedroom here is $2,100. You need two people with minimum wage jobs to afford that and they're still rent burdened. They should increase their wages before considering buying. They've now bought at the peak of the market with high interest rates and a super low down payment. Hope they didn't get an adjustable and never have an emergency or job loss.

One issue I've found with people living in rent control units is they never strive to increase their income because they don't need to. I can only imagine how low the rent is for that studio after having been there for 25 years. It's wayyyyyyy below market rent. They've been taking advantage of their landlord who has subsidized their rent for 25 years. Their landlord is probably also an immigrant Latino. 

Legally they were not allowed to have four people in there. They could have been evicted easily but the landlord was nice to them and allowed them to stay. It's two people max allowed for a studio though sometimes they'll allow a very young underage child.

As I read the article the two kids weren't old enough to work until about 2022. They said they both went to college then grad school. They chose not to get full time jobs. Then they said they, I assume the two daughters, make over $136,650 a year combined. They did at least state they were happy they had low rent so they could save a lot of money for years. That's nice. It also means they are admitting they could have afforded a bigger better place if they wanted to. They are complaining about a situation they created for themselves.

The writers state they applied for the BofA program but didn't qualify because they made too much money. They also applied for the California Dream for All program which ran out of funds. Then they whined about the pay back part of one program if they accrue equity and sell. That's how the program works and is funded! We're really just taking their word for it. There could be more involved like credit scores, time at their jobs, other debt like car payments, credit card debt, bad debt, student loans...

They ended up buying a home outside of expensive downtown Los Angeles with 3% down. This was after they basically complained about rising rents, home prices and gentrification. They moved somewhere else and contributed to gentrification in that area. "Gentrification" has nothing to do with race but finances. Finances correlate with race in the US. Whites make more than Latinos and Blacks. It's actually just the revitalization cycle of real estate. People get pushed out of more expensive areas into less expensive areas. That's what happened with this family. They originally found a cheap place to live because it was in the recession phase before the recovery phase. They just did the same with their new place. They committed "gentrification."

Jennifer and Paula Nazario suggest government programs should provide free or cheap down payments for homes for poor people with low income jobs, bad credit, lots of debt and no savings. They clearly were not paying attention in class especially Jennifer with her Economics degree. If anyone can basically buy a home for free even though they can't easily make the mortgage, taxes, insurance, upkeep expenses, they will default and lose the home. That's why conventional loans don't allow you to borrow the down payment money. If you aren't making enough income to afford the down payment, you can't weather any emergency and won't be able to pay back the loan. Someone with no money in the deal won't care as much about losing the property. No bank would loan on a property without an equity cushion for fees, costs if they get stuck with it in foreclosure. There is a ton of years long research on this. 

Someone should have dissuaded the Nazarios from writing this clueless op-ed piece. It makes them look really stupid. I wasn't going to say anything until I saw that Jennifer has a degree in Economics. I'm truly embarrassed for them because I'm Latino. Thankfully I have common sense and don't expect the government to pay for everything for me. You have to do some things for yourself in this world.

From the article: "Jennifer Nazario is a systems administrator at a network of college-preparatory schools and a first-generation college graduate with a master’s degree in economics. Paula Nazario is an assistant director at UCLA and the first person in her family to go to college. She has a master’s degree in public policy."

https://www.yahoo.com/news/family-four-shared-cramped-studio-100112963.html

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.

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Office to Housing Conversion is Not Easy, by Mary Cummins Real Estate Appraiser Los Angeles California

Office to Housing Conversion, Mary Cummins, Real Estate Appraiser, Los Angeles, California, Adaptive Reuse, Housing Crisis, housing

Because of the pandemic many people have been working from home instead of at an office building. For this reason office vacancy rates have increased. Some large companies are allowing their employees to continue to work from home even as pandemic restrictions are lifted and eased. People are using Zoom meetings, Zoom court appearances and other forms of virtual meetings instead of in person meetings. For this reason those same companies aren't renewing leases on large office spaces in San Francisco, New York and Los Angeles.

Many people have been saying we should convert that office space to residential use to help solve the housing crisis. People who are not in the real estate industry do not realize how difficult and expensive it would be to convert office to residential. It generally would not make financial sense from the investor, lender point of view. This article discusses the issues involved in adaptive reuse of office buildings for residential units. 

1. Office Buildings Were Not Designed or Built to Be Housing

Office buildings are generally built to cover the entire parcel of land to the sidewalk. They are built around a central elevator system. Some offices near the center of the building will not have windows or natural light which is permitted for commercial offices. Residential units must have windows and light. You would only be able to have units around the outer edges of the building for that reason. 

"While it may seem like all that empty space would be better used for unhoused people, architects must navigate challenges like finding the right amount of space between a building's elevator bank and its windows.

"There's a Goldilocks factor: The floor plate can't be too small, and it can't be too big," said Kristina Garcia, a researcher with the real estate brokerage Cushman Wakefield, using an industry term for the leasable space on a given floor of a high-rise office tower. "There's limiting factors to why adaptive reuse hasn't happened as much."

Most modern office buildings have floor plates of about 25,000 square feet — about half the size of a football field — a figure that has generally crept up over the decades. More recently built high-rise office buildings are often considerably larger than their decades-old counterparts." 

"The donut around the building is the habitable zone. What do you do with the interior space?" Cetra said. (Ref. 1)

Another factor is the addition of many new bathrooms and kitchens to the building. Offices generally have one or two common bathrooms with toilets, sinks only per floor. They have no showers, laundry facilities or kitchens. The plumbing, sewer and electrical would have to be completely redone and upgraded which is very expensive. 

1130 Flower in downtown Los Angeles was a US Post Office converted to luxury condos. There were sewer issues after it was converted. Sewage backed up out of the building and down the street because the 100+ year old sewer pipes were not made for that many new bathrooms, showers, sinks and laundry facilities. 

The only reason 1130 Flower was attempted was because of the many developer and investor bonuses. The area was pretty run down at the time. There were density bumps for building next to public transportation, converting an old building, building next to the old Staples center and building in an enterprise development zone. They were able to not vent the kitchen stoves and washer/dryers. They were able to offer very few full size parking spaces. The live/work units on the converted bottom floor are deep, dark and have a funky functionally obsolete floor plan. The ones facing west on directly on the Metro train tracks and extremely loud and sooty. They basically had to cut the building in half and add an open hallway down the middle so the units would not be as deep and dark. Thankfully the post office naturally had a lot of windows for natural light on the outside because they sorted mail there. It was still a long, difficult and expensive process and the units have many issues today. Pic of 1130 Flower from top showing the area they had to cut out in order to increase window area. Even with the cut out the lofts on the inside are narrow, deep and dark with no side windows. They are two story open lofts for this reason. 

2. Office buildings do not have to abide by the many Building and Safety requirements for residential units. 

Residential construction standards are generally much higher than commercial construction standards. Windows must be certain sizes. There must be more fire escapes especially in high rises. There must be fire doors that close automatically. The cost to upgrade a commercial building to residential is exorbitant to the point of being cost prohibitive.

3. It's Cheaper, Easier to Build New on Vacant or Under Utilized Land

The cost to convert an office building to residential is generally more expensive than building residential from the ground up. You can't just add a bed to an office suite and call it an apartment. You're not just adding a bathroom and kitchen. You're adding many bathrooms, kitchens, laundry facilities which need upgraded plumbing, electrical and vents. The building must meet fire requirements for residential instead of just commercial. There needs to be 1.5 parking spots per one bedroom units and 2.5 for two bedroom units. 

4. Office Space is More Valuable than Residential Space

"Often, real estate and architectural experts say, the bureaucratic processes are too difficult and the conversions are too costly, and many developers and property owners would rather wait out the pandemic than begin a yearslong process."

It would probably make more sense for the commercial landlord to wait out a high vacancy period so they can later rent for office rates instead of lower residential rates. They can rent the office space for other uses at a lower rate in the meantime. 

No matter the situation the rental rate of office to residential conversion would most likely be in the luxury rental zone due to location and cost of land. Luxury rentals don't really help affordable housing and it definitely doesn't help the homeless. The new luxury units would free up other units for others but generally not enough to make a huge dent in the housing crisis.

5. Easier to Convert Retail, Industrial, Warehouse, Motel/Hotel to Residential or Mixed Use

For all of these reasons it's easier and cheaper to convert retail, industrial, warehouse, motel/hotel to residential or mixed use buildings. They are better designed and laid out than office buildings. Old industrial, warehouse buildings have lots of natural light. There have been many industrial buildings converted to lofts especially in the Arts District near downtown Los Angeles. Motels/hotels are easier to convert to long term residential for obvious reasons. That's generally just a matter of adding a legal kitchen and upgrading the building to current long term residential code.

While the idea of converting empty office space to residential sounds great it doesn't work that easily in the real world for many reasons. We do have a housing crises especially in high density metro areas such as Los Angeles, San Francisco and New York. The answer is not converting office to residential. The answer is making residential construction easier by cutting some red tape and streamlining the process. The recent state bills allowing units to be built on residential land will help a little though it won't solve the housing crisis. Here is a previous article I wrote about solving the housing crisis in 2019 with more solutions. I'm happy to state that many of the ideas have been implemented since I wrote the article. 

*All codes, standards cited are Los Angeles, California which has some of the strictest building standards in the nation. California as a whole has higher building standards than the rest of the US.

1. https://www.nbcnews.com/business/real-estate/why-empty-offices-aren-t-being-turned-housing-despite-lengthy-n1274810

Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.

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Cause of increase in homelessness is lack of Class B, C units for rent. Mary Cummins estate appraiser

This is the cause of the increase in homelessness right here. There are few Class B, C apartments. This is causing rent to increase at double the normal rate. If LA had only built enough units starting 30 years ago, we wouldn't have this problem today. This problem is 30+ years in the making. Land and labor are now so expensive that only luxury units (Class A) make sense to build in Los Angeles.

"Minimal availability among Class B and C apartments is generating above-trend rent growth of mid-4 to low-5 percent, well above the traditional 2-3 percent range observed in prior years."

Another cause is real estate investors buying run down Class B and C buildings, evicting tenants, renovating and turning units into Class A-/B+ units which they rent for market. The stock of cheap apartments is getting smaller and smaller. Investors can make more money buying existing run down building and renovating then renting for market rent than building new.

https://blog.marcusmillichap.com/2019/06/13/tight-labor-market-constrains-job-creation

Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the
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